In a statement, CCCS said it received a joint application for a decision from SIA and MAB on the proposed commercial cooperation and accepted the application as complete on Oct 30, 2019.

CCCS said it is now assessing whether the proposed commercial cooperation would infringe Section 34 of the Competition Act (Cap. 50B), which prohibits agreements or concerted practices by undertakings which prevent, restrict or distort competition within any market in Singapore.

The proposed commercial cooperation comprises a commercial cooperation framework agreement that both airlines entered into on Oct 30, 2019, pursuant to which they agree to cooperate on scheduling, pricing, sales and marketing, and other areas, including special prorate arrangements and expanded code sharing to grow traffic between Malaysia and Singapore and between Malaysia or Singapore and certain agreed markets such as Europe.

They have submitted that while they — including their subsidiaries — provide overlapping direct and indirect routes between Singapore and seven destinations in Malaysia, the relevant market for the purposes of the competitive analysis of the proposed commercial cooperation should be focused on the overlapping direct routes.

The overlapping direct routes comprise Singapore-Kuala Lumpur and Singapore-Kuching, while the overlapping indirect routes comprise Singapore-Kuantan, Singapore-Langkawi, Singapore-Penang, Singapore-Kota Kinabalu, and Singapore-Kota Bharu.

Both airlines also submitted that the proposed commercial cooperation is unlikely to result in any adverse effects on competition as, among others, they will continue to face intense competition from low-cost carriers on the overlapping direct routes.

In addition, both parties submitted that the proposed commercial cooperation will also result in significant efficiencies, as well as consumer and economic benefits.